IN THE MATTER OF
THE SECURITIES ACT
R.S.O. 1990, c.S.5 AS AMENDED
IN THE MATTER OF
WHEREAS on April 1, 2002,the Ontario Securities Commission issued a Notice of Hearingpursuant to sections 127(1) of the Securities Act inrespect of Fran Harvie and other respondents;
AND WHEREAS Fran Harvieentered into a settlement agreement dated June 17, 2002, hasagreed to a proposed settlement of the proceeding, subject tothe approval of the Commission;
AND WHEREAS Staff hasprovided notice to bring this matter back on for hearing;
AND UPON REVIEWING thesettlement agreement and the statement of allegations of Staffof the Commission and upon hearing submissions of counsel forFran Harvie and of Staff;
AND WHEREAS the Commissionis of the opinion that it is in the public interest to makethis order;
IT IS HEREBY ORDEREDthat:
1. The settlement agreementdated June 17, 2002, attached to this order is hereby approved;
2. Pursuant to subsection127(1)(6) of the Act, Fran Harvie is reprimanded;
3. Pursuant to subsection127(1)(2) of the Act, Fran Harvie is prohibited from tradingin any securities for a period of five years; and
4. Pursuant to subsection127(1)(8) of the Act, Fran Harvie is prohibited from becomingor acting as a director or officer of any issuer for a periodof five years.
June 20, 2002.
"Howard Wetston" "GaryBrown"
IN THE MATTER OF
THE SECURITIES ACT
R.S.O. 1990, c.S.5, AS AMENDED
IN THE MATTER OF
1. By Notice of Hearing datedApril 1, 2002, the Ontario Securities Commission announcedthat it proposed to hold a hearing to consider whether, pursuantto sections 127(1) and 127.1 of the Securities Act,R.S.O. 1990, c.S.5 as amended, it is in the public interestfor the Commission:
(a) to order that tradingin securities by the Respondent, Fran Harvie and other Respondents,cease permanently or for such other period as specifiedby the Commission;
(b) to order that Harvie,and other Respondents, be prohibited from becoming or actingas a Director or Officer of any issuer;
(c) to make an order thatthe Harvie, and other Respondents be reprimanded; and
(d) to make an order thatHarvie and other Respondents pay costs to the Commission.
II. Joint Settlement Recommendation
2. Staff agrees to recommendsettlement of the proceeding initiated in respect of the respondentHarvie by Notice of Hearing in accordance with the terms andconditions set out below. Harvie consents to the Commissionorder in the form attached as schedule "A" on thebasis of the facts set out below.
III. Statement of Facts
3. Solely for the purposesof this proceeding, and of any other proceedings commencedby a securities regulatory agency, Harvie agrees with thefacts as set out in this Part III.
4. Lydia Diamond Explorationsof Canada Ltd., ("Lydia"), which is also a Respondentin these proceedings, is an Ontario Corporation. It is a Toronto-baseddiamond exploration company with forty contiguous mining claimsat its Wolf Lake property in southern Ontario. Lydia was formedby the amalgamation of Lydia Consolidated Diamond Mines ("LydiaConsolidated") and Acadia Mineral Corporations on May16, 2001. This amalgamation was approved by the Commissiondes valeurs mobilieres du Quebec and Lydia became a reportingissuer in British Columbia, Alberta, Ontario and Quebec. LydiaConsolidated was an Ontario private corporation. It was incorporatedon February 10, 1995.
5. Jurgen and Emilia von Anhalt,("Jurgen" and "Emilia") who are also Respondentsin these proceedings, own the controlling interest in Lydia.They are both officers and directors of the corporation.
6. Harvie provides psychicconsulting to clients. Emilia consulted her as a client andas a psychic consultant and Harvie told her she would be miningdiamonds. Emilia then returned with maps and Harvie "dowsed"the maps with her hands and showed her where she felt thediamonds were located. Later, Harvie was invited to Wolf Lakewhere Harvie "dowsed" the property with dowsingrods. The physical locations lined up with the locations onthe maps. Then Emilia consulted with Harvie more regularlyand they became friends. Overtime, Harvie told acquaintancesof hers about Emilia and Lydia and over time Harvie introducedthem to Emilia.
Illegal Distribution of LydiaShares
7. Between July 20, 1996 andDecember 1, 2000 shares in Lydia were sold to more than 50persons without registration and without an exemption to therequirement for registration under Ontario securities law.During this time there were as many as 398 shareholders inLydia. Between August 17, 1999 and July 28, 2000 Harvie soldshares to approximately 341 shareholders. These shares wereissued in the name of Harvie but were held for the 341 shareholders.Harvie was advised by Lydia that holding the shares in thismanner was permissible.
8. Between April 23, 2001and May 10, 2001, Harvie introduced investors who purchaseda total of 489,450 shares.
9. Harvie received approximately$95,000 in commissions for bringing investors to Lydia. Thecommissions were paid in cash or in shares by Lydia.
10. Harvie has never beenregistered with the Commission in any capacity and the exemptionsin the Act are not available to her.
IV. Conduct Contrary to OntarioSecurities Law
11. The conduct of Harvieviolated Ontario securities law and was contrary to the publicinterest.
V. Terms of Settlement
12. Harvie agrees to the followingterms of settlement:
(a) that the Commissionorder pursuant to clause 2 of subsection 127 (1) of theAct, that Harvie is prohibited from trading in securitiesfor a period of five years;
(b) that the Commissionorder pursuant to clause 8 of subsection 127(1) of the Act,that Harvie will not be an officer or director of an issuerfor a period of five years.
(c) that the Commissionorder pursuant to clause 6 of subsection 127(1) of the Actthat Harvie be reprimanded; and
13. Harvie consents to anorder of the Commission incorporating the provisions of partfive above in the form of an order attached as schedule "A".
VI. Staff Commitment
14. If this settlement isapproved by the Commission, Staff will not initiate any otherproceeding under the Securities Act, R.S.O. 1990, c.S.5 against Harvie respecting the facts set out in Part IIIof this Settlement Agreement and any other matter which hascome to the attention of Staff in relation to Staff's investigationinto the conduct of Harvie up to the date of this settlementagreement, except in relation to any matter if Staff concludesthat any information provided by Harvie to Staff in relationto Staff's investigation of such matter is not accurate.
VII. Approval of Settlement
15. Approval of the settlementset out in this Settlement Agreement shall be sought at thepublic hearing of the Commission scheduled for June 20, 2002at 2:00 p.m., or such other date as may be agreed to by Staffand Harvie.
16. Counsel for Staff or/andcounsel for Harvie may refer to any part, or all, of thisSettlement Agreement at the Settlement Hearing. Staff andHarvie agree that this Settlement Agreement will constitutethe entirety of the evidence to be submitted at the SettlementHearing.
17. If this settlement isapproved by the Commission, Harvie agrees to waive her rightsto a full hearing, judicial review or appeal of the matterunder the Act.
18. Staff and Harvie agreethat if this settlement is approved by the Commission, theywill not make any public statement inconsistent with thisSettlement Agreement.
19. If, for any reason whatsoever,this settlement is not approved by the Commission, or an orderin the form attached as Schedule "A" is not madeby the Commission;
(a) this Settlement Agreementand its terms, including all discussions and negotiationsbetween Staff and Harvie leading up to its presentationat the Settlement Hearing, shall be without prejudice toStaff and Harvie;
(b) Staff and Harvie shallbe entitled to all available proceedings, remedies and challenges,including proceeding to a hearing of the allegations inthe Notice of Hearing and Statement of Allegations of Staff,unaffected by this Settlement Agreement or the settlementdiscussions/negotiations;
(c) the terms of this SettlementAgreement will not be referred to in any subsequent proceeding,or disclosed to any person except with the written consentof Staff and Harvie, or as may be required by law; and
(d) Harvie agrees that shewill not, in any proceeding, refer to or rely upon thisSettlement Agreement, the settlement discussions/negotiationsor the process of approval of this Settlement Agreementas the basis of any attack on the Commission's jurisdiction,alleged bias or appearance of bias, alleged unfairness orany other remedies or challenges that may otherwise be available.
VIII. Disclosure of Agreement
20. Except as permitted underparagraph 19 above, this Settlement Agreement and its termswill be treated as confidential by Staff and Harvie untilapproved by the Commission, and forever if, for any reasonwhatsoever, this settlement is not approved by the Commission,except with the written consent of Staff and Harvie, or asmay be required by law.
21. Any obligations of confidentialityshall terminate upon approval of this settlement by the Commission.
IX. Execution of SettlementAgreement
22. This Settlement Agreementmay be signed in one or more counterparts which together shallconstitute a binding agreement.
23. A facsimile copy of anysignature shall be as effective as an original signature.
June 18, 2002.
June 17, 2002.